Workers reach $21-million settlement against Wal-Mart, warehouses

Workers at a Riverside County warehouse and distribution complex for Wal-Mart Stores Inc. agreed to settle a long-running battle over wage issues by accepting $21 million in unpaid wages, interest and penalties.

The proposed settlement of a lawsuit with Wal-Mart and Schneider Logistics Inc. covers more than 1,800 people who worked at three Mira Loma facilities from 2001 to 2013.

The Schneider facilities were fully dedicated to Wal-Mart’s business, according to court documents in a lawsuit brought by the Warehouse Worker Resource Center, the group that announced a memorandum of understanding Monday.

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FOR THE RECORD:
Wal-Mart warehouses: In the May 15 Business section, an article about wage disputes at Riverside County warehouses serving Wal-Mart Stores Inc. said that the Warehouse Worker Resource Center filed a lawsuit to recover back pay. The center aided the workers in finding a law firm, which filed the suit on behalf of the workers.
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“We are pleased with this proposed settlement,” said Wal-Mart spokesman Kory Lundberg. “Once approved, it will result in the dismissal of the lawsuit.”

A spokeswoman for Schneider Logistics did not immediately respond to a request for comment.

Under the agreement, Schneider would pay the total amount without any contribution from Wal-Mart, according to a person with knowledge of the agreement who didn’t want to be identified because such details weren’t public yet.

The proposed settlement is the culmination of a nearly three-year effort by warehouse workers to address wage and labor violations that they said were endemic in the logistics center, part of a massive industry in Riverside County.

Besides Wal-Mart, dozens of retailers and contractors operate numerous warehouses and distribution centers in the Inland Empire to move goods from and to Southern California ports. The industry accounts for about 114,000 jobs in the region, according to trade economist John Husing.

The warehouse workers group sued Schneider in October 2011, and later added Wal-Mart, winning a key victory.

Judge Christina A. Snyder of U.S. District Court for the Central District of California ruled in February that Wal-Mart could be named as co-defendant in the lawsuit based on evidence that it could be held accountable as a joint employer.

The lawsuit argued that Wal-Mart exercised tremendous control over warehouse operations, including setting productivity metrics and safety standards.

Snyder also denied a motion by Wal-Mart and Schneider Logistics to dismiss the suit.

In February, the warehouse workers sought class-action status. Negotiations toward ending the litigation then turned more serious, said Theresa Traber, one of the lead attorneys for the warehouse workers.

“This is a wonderful settlement,” Traber said. “This is an industry where retail companies like Wal-Mart and the logistics companies try to evade the law.... The giants have finally been held accountable.”

The facilities, operated by various warehouse companies for Wal-Mart since 2001, function together as the largest Wal-Mart distribution center in the western U.S., court documents said.

The suit alleged major wage theft occurring over 10 years against “lumpers” — workers who load and unload boxes by hand from shipping containers.

The workers often worked double shifts — 16 hours a day, seven days a week with no required breaks or overtime premiums — and often for less than minimum wage, according to the suit.

The workers alleged they were instead paid by an elaborate piece-rate system that was found to be illegal and was changed quickly after the suit was filed by the warehouse workers group, which consists mainly of Latino immigrants.

Guadalupe Rangel, 45, one of the workers expected to share in the $21-million settlement, said he first began working as a warehouse worker in 2005 for Impact Logistics Inc.

Impact was one of two subcontractors that employed warehouse workers at the Mira Loma facilities. The other firm was Premier Warehousing Ventures.

Warehouse workers already had won a combined settlement of $1.7 million from those two firms, Traber said.

Rangel, a resident of Bloomington, said that in the first years he unloaded containers during long days that were full of tough, manual labor.

Workers unloaded all sorts of merchandise bound for Wal-Mart stores, including patio furniture, trampolines and above-ground pools, he said in Spanish.

“Thank God we’re now going to receive compensation for the years before when they didn’t pay us well,” said Rangel, now a Schneider employee. “I see those years as abusive ... when we’d only earn $100 to $150 a week.”

The proposed settlement is expected to receive final approval later this year, Traber said.

ricardo.lopez@latimes.com

Twitter: @rljourno

Times staff writer Marc Lifsher in Sacramento contributed to this report.